HUMMINGBIRD Resources said it expected to reach commercial production at its Kouroussa mine in Guinea in the third quarter – nearly a year after commissioning. The news resulted in a 10% decline in the firm’s share price in UK mid-morning trade.
The mine has been plagued by operating difficulties. In a third quarter review last year, Hummingbird said skills and mining equipment problems resulted in “challenges”. By December, it was forced to refinance its balance sheet with a $30m placement as it became clear Kouroussa would fall short of cash flow projections.
It last year committed to reducing debt $123m over three years after raising $55m with Coris Bank International. Of this debt target some $77m was targeted for repayment by the end of 2024.
Then in March this year, the company said it would miss its first quarter production target after a new crisis befell Kouroussa involving a mining contractor which sent on strike. A settlement was eventually reached.
Since resuming operations at Kouroussa last month some 4,000 ounces of gold had been produced. Kouroussa has a nameplate production of 120,000 oz/year.
The company said in an update today ahead of its annual general meeting that the mining fleets at Kouroussa were “fully operational” and were mining transitional as well as fresh ore. A detailed update of production would be proviced in late July with its second quarter results announcement, it said.
Hummingbird’s litany of problems has seen it all but miss the current gold price run. The share has lost around 40% over the past 12 months.
